CONCEPT OF STRATEGY
A typical dictionary defines the word ‘strategy’ as something that has to do with war and ways to win over enemy. In the context of business, the application of this term is not much different. Businesses have to respond to dynamic and often hostile external forces while pursuing their mission and objectives.
The very injection of the idea of strategy into business organizations is intended to unravel complexity and to reduce uncertainty caused by changes in the environment. Strategy seeks to relate the goals of the organization to the means of achieving them. Strategy is the game plan that the management of a business uses to take market position, conduct its operations, attract and satisfy customers, compete successfully, and achieve organizational objectives.
to the extent the term strategy is associated with unified design and action for achieving major goals, gaining command over the situation with a long-range perspective and securing a critically advantageous position, its implications for corporate functioning are obvious.
We may define the term ‘strategy’ as a long range blueprint of an organization’s desired image, direction and destination, i.e., what it wants to be, what it wants to do and where it wants to go.
Following are also important other definitions re to understand the term:
Igor H. ansoff : the common thread among the organization’s activities and product-markets that defines the essential nature of business that the organization has or planned to be in future.
William F. Glueck : a unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved.
Strategy is consciously considered and flexibly designed scheme of corporate intent and action to mobilise resources, to direct human effort and behaviour, to handle events and problems, to perceive and utilise opportunities, and to meet challenges and threats for corporate survival and success.
Strategy is meant to fill in the need of organizations for a sense of dynamic direction, focus and cohesiveness. Objectives and goals alone do not fill in the need. Strategy provides an integrated framework for the top management to search for, evaluate and exploit beneficial opportunities, to perceive and meet potential threats and crises, to make full use of resources and strengths, to offset corporate weaknesses.
However, strategy is no substitute for sound, alert and responsible management. Strategy can never be perfect, flawless and optimal. It is in the very nature of strategy that it is flexible and pragmatic; it is art of the possible; it does not preclude second-best choices, trade-offs, sudden emergencies, pervasive pressures, failures and frustrations. that is why in a sound strategy, allowances are made for possible miscalculations and unanticipated events.
In large organisations, strategies are formulated at the corporate, divisional and functional levels. corporate strategies are formulated by the top managers. Such strategies include the determination of the plans for expansion and growth, vertical and horizontal integration, diversification, takeovers and mergers, new investment and divestment areas, r & d projects, and so on. these corporate wide strategies need to be operationalized by divisional and functional strategies regarding product lines, production volumes, quality ranges, prices, product promotion, market penetration, purchasing sources, personnel development and like.
Strategy is partly proactive and partly reactive: a company’s strategy is typically a blend of
Igor H. ansoff : the common thread among the organization’s activities and product-markets that defines the essential nature of business that the organization has or planned to be in future.
William F. Glueck : a unified, comprehensive and integrated plan designed to assure that the basic objectives of the enterprise are achieved.
Strategy is consciously considered and flexibly designed scheme of corporate intent and action to mobilise resources, to direct human effort and behaviour, to handle events and problems, to perceive and utilise opportunities, and to meet challenges and threats for corporate survival and success.
Strategy is meant to fill in the need of organizations for a sense of dynamic direction, focus and cohesiveness. Objectives and goals alone do not fill in the need. Strategy provides an integrated framework for the top management to search for, evaluate and exploit beneficial opportunities, to perceive and meet potential threats and crises, to make full use of resources and strengths, to offset corporate weaknesses.
However, strategy is no substitute for sound, alert and responsible management. Strategy can never be perfect, flawless and optimal. It is in the very nature of strategy that it is flexible and pragmatic; it is art of the possible; it does not preclude second-best choices, trade-offs, sudden emergencies, pervasive pressures, failures and frustrations. that is why in a sound strategy, allowances are made for possible miscalculations and unanticipated events.
In large organisations, strategies are formulated at the corporate, divisional and functional levels. corporate strategies are formulated by the top managers. Such strategies include the determination of the plans for expansion and growth, vertical and horizontal integration, diversification, takeovers and mergers, new investment and divestment areas, r & d projects, and so on. these corporate wide strategies need to be operationalized by divisional and functional strategies regarding product lines, production volumes, quality ranges, prices, product promotion, market penetration, purchasing sources, personnel development and like.
Strategy is partly proactive and partly reactive: a company’s strategy is typically a blend of
(1) proactive actions on the part of managers to improve the company’s market position and financial performance and
(2) reactions to unanticipated developments and fresh market conditions. In other words, a company uses both proactive and reactive strategies to cope up the uncertain business environment. Proactive strategy is planned strategy whereas reactive strategy is adaptive reaction to changing circumstances.
the biggest portion of a company’s current strategy flows from previously initiated actions and business approaches that are working well enough to merit continuation and newly launched managerial initiatives to strengthen the company’s overall position and performance. this part of management’s game plan is deliberate and proactive, standing as the product of management’s analysis and strategic thinking about the company’s situation and its conclusions about how to position the company in the marketplace and tackle the task of competing for buyer’s patronage.
But not every strategic move is the result of proactive planning and deliberate management design. Things happen that cannot be fully anticipated or planned for. When market and competitive conditions take an unexpected turn or some aspect of a company’s strategy hits a stone wall, some kind of strategic reaction or adjustment is required. Hence, a portion of a company’s strategy is always developed as a reasoned response to unforeseen developments. But apart from adapting strategy to changes in the market, there is also a need to adapt strategy as new learning emerges about which pieces of the strategy are working well and which aren’t and as management hits upon new ideas for improving the strategy. crafting a strategy thus involves stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company’s situation change or better options emerge-a reactive/adaptive strategy.
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the biggest portion of a company’s current strategy flows from previously initiated actions and business approaches that are working well enough to merit continuation and newly launched managerial initiatives to strengthen the company’s overall position and performance. this part of management’s game plan is deliberate and proactive, standing as the product of management’s analysis and strategic thinking about the company’s situation and its conclusions about how to position the company in the marketplace and tackle the task of competing for buyer’s patronage.
But not every strategic move is the result of proactive planning and deliberate management design. Things happen that cannot be fully anticipated or planned for. When market and competitive conditions take an unexpected turn or some aspect of a company’s strategy hits a stone wall, some kind of strategic reaction or adjustment is required. Hence, a portion of a company’s strategy is always developed as a reasoned response to unforeseen developments. But apart from adapting strategy to changes in the market, there is also a need to adapt strategy as new learning emerges about which pieces of the strategy are working well and which aren’t and as management hits upon new ideas for improving the strategy. crafting a strategy thus involves stitching together a proactive/intended strategy and then adapting first one piece and then another as circumstances surrounding the company’s situation change or better options emerge-a reactive/adaptive strategy.
http://www.comgurukul.com/educational-books/gst-book/
GST (Goods and Services Tax) Book -A student friendly Latest and Updated Best GST Book - Bharat Gurukul
GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Intermediate
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